Wednesday, October 5, 2022

Crypto Lender Babel Finance Joins the Bandwagon as it Halts withdrawal

With the crypto market at its lowest point at the moment and the consequent effect on the crypto service providers, Babel Finance is among the latest that shows it is feeling the heat. In an announcement on its website on Friday, the Hong Kong-based crypto lender said it is pausing withdrawals and redemption.

As per the announcement, the current market situation has informed this decision. The company added that it is facing unusual liquidity pressures.

It further added that the decision is in the interest of its clients as it maintains close communication with all parties. The crypto lender also promised to regularly update its community.

The move follows the company’s series B financing round just last month where it raised $80 million. This round brought the crypto lender to a $2 billion valuation after three years since it began operations.

Founded in 2018, Babel Finance is a growing force in the crypto-financial service market. It centers around servicing professional and high-end investors with customized solutions.

The firm generates $8 billion on average monthly as per trade volume.

The Knock-on effect of the bear market on crypto lending firms

The crypto industry is a young one and is bound to experience bumps along the way. As the crypto winter continues, it remains to be seen how firms react to the heat of the wave.

The market is currently struggling following a downward spiral that started after the Terra-Luna crash. This week began with crypto lending services platform Celsius halting withdrawals indefinitely. It cited the prevalent “extreme market conditions”.

With consideration of the impact of Celsius’ insolvency, rival lending platform Nexo offered to absorb all its loans in exchange for the Celsius customer database amongst other things.

Finblox also placed a limit on withdrawals after speculations that its partner Three Arrow Capital is battling insolvency. The heat also had leading crypto exchange firm Binance momentarily suspend withdrawals as there was a backlog of transactions.

Contrary to its initial plan to add 2000 members to its workforce, Coinbase downsized its staff strength by 18% to keep up with the prevailing conditions.

 

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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